2019 (8) TMI 1277 - AAR - GST

Levy of GST - Reverse charge mechanism - freight paid by the applicant on transportation of cotton seed oil cake - HELD THAT - The various products of human consumption like milk and food grains are exempted from GST as goods as well as their transportation. The same is notified through Notification No. 12/210 dated 28.06.2017. The cotton seed oil cake is not exempted under the GST Act in general and is also not covered under Notification No. 12/2017 (as amended from time to time). Thus being recipient of GTA services the applicant is liable to pay tax under Reverse Charge Mechanism. Thus, the applicant is liable to pay GST under Reverse Charge Mechanism being recipient of GTA services.

Summary

Issues Involved:
- Interpretation of GST liability on transportation of cotton seed oil cake under reverse charge mechanism.

Analysis:
1. Submission and Interpretation of the Applicant:
- The applicant, engaged in trading cotton seed oil cake, sought an advance ruling on the exemption of this good under GST and the liability to pay tax on freight charges.

2. Questions for Advance Ruling:
- The primary question was whether the applicant is liable to pay tax under the reverse charge mechanism for the freight paid on transporting cotton seed oil cake.

3. Personal Hearing:
- The applicant presented the case during the personal hearing, confirming payment of GST on freight charges and requesting early disposal of the application.

4. Comments of the Jurisdictional Officer:
- The jurisdictional officer opined that transportation services by Goods Transport Agency (GTA) attract a 5% GST rate, indicating the applicant's liability to pay tax on transporting cotton seed cake.

5. Findings, Analysis & Conclusion:
- The ruling authority observed the applicant's GST payment on freight charges under reverse charge mechanism.
- Invoices submitted showed no GST charged on goods received by the applicant.
- Referring to Notification No. 13/2017, the authority concluded the applicant, as the service recipient, is liable to pay GST on transportation.
- The applicant's argument on exempted goods like food grains was deemed hypothetical, as GST liability is based on factual GST law provisions.
- Notification No. 12/2017 exempts specific goods from GST, but cotton seed oil cake is not covered, making the applicant liable under the reverse charge mechanism.

6. Ruling:
- The ruling stated that the applicant is obligated to pay GST under the reverse charge mechanism as the recipient of GTA services.

This comprehensive analysis of the judgment in the Advance Ruling Authority case provides a detailed overview of the issues, submissions, interpretations, and final ruling regarding the GST liability on the transportation of cotton seed oil cake under the reverse charge mechanism.